(File Photo)

(File Photo)

Lower taxes, new RRSP rules among 2020 changes in Canada

$75 credit for digital news subscriptions and Alberta now has a federal carbon tax

Federal changes coming into effect Jan. 1 will lower taxes for most Canadians and affect retirees, recently separated individuals who want to use their retirement savings to buy a home, and digital news consumers.

The basic amount most Canadians can earn tax-free is going up on Jan. 1, resulting in slightly lower federal income taxes.

The increase in the basic personal amount was promised by the Liberals during the federal election campaign and is being phased in over four years until it reaches $15,000 in 2023.

For this year, the exemption amount will increase from $12,069 to $13,229. That will result in federal income tax savings of $113 in Quebec and $138 in the rest of Canada, according to the Canadian Taxpayers Federation.

The benefit will be lower for anyone earning more than $150,473 during the year and will be reduced to zero for Canadians with incomes above $214,368.

The tax cut will also be offset on individual paycheques by an increase in Canada Pension Plan premiums of up to $97, the CTF calculated. At the same time, employment insurance premiums will decrease, producing savings of about $20 for workers outside of Quebec, where the EI premium benefit will add up to $48 for some individuals.

Overall, residents of Ontario and Quebec earning less than $100,000 annually will see net savings of between $55 and $116, the federation estimated.

Also effective Jan. 1, Canadians experiencing a breakdown in their marriage or common-law partnership can qualify to withdraw money from their registered retirement savings plan, without incurring a tax penalty, to buy a home.

The Finance Department said individuals who make a withdrawal in the year a breakup occurs, or in the four preceding calendar years, can access the Home Buyers’ Plan, even if they are not a first-time home buyer.

It allows first-time home buyers to withdraw up to $35,000 from an RRSP to put toward a down payment without having to pay tax on the withdrawal.

KEEP READING: Hiking carbon tax to $210 cheapest way to hit Canada’s climate targets, commission says

Among the other federal tax changes coming into effect:

— Canadians who pay up to $500 for digital news subscriptions can apply for a $75 tax credit.

— Certain journalism organizations operating as not-for-profits will be allowed to register to receive donations from Canadians who can claim the amount for a charitable donation tax credit. Businesses donating money can also apply for tax savings.

— Two new types of annuities are being permitted under the tax rules for certain registered plans to provide Canadians with greater flexibility in managing their retirement savings.

— And, the federal carbon tax is being implemented in Alberta. The $20-per-tonne charge for carbon emissions will add to the cost of gas, diesel and heating fuels. Albertans had been paying a provincial carbon tax until it was abolished by the UCP government less than two months after the party won the Alberta election in the spring. Canadians in other provinces are already paying some form of carbon tax.

Terry Pedwell, The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Alberta’s chief medical officer of health, Dr. Deena Hinshaw, confirmed eight additional virus-deaths Monday afternoon including one in central zone. (Photo by Chris Schwarz/Government of Alberta)
New record: Red Deer at 236 active COVID cases

One more death in central zone reported

(Photo Courtesy of Fortis Alberta)
New FortisAlberta instillation in Sylvan means more reliability and shorter power interruption times

FortisAlberta recently installed a Distribution Automation system in Sylvan Lake

Sylvan Lake RCMP Detachment. Photo Courtesy of Google Maps
Sylvan Lake RCMP address three key areas of resident concern

RCMP were notified of these main areas of concern through an online Town Hall

Alberta had 1,571 active COVID-19 cases on Tuesday. THE CANADIAN PRESS
Alberta’s central zone now has 1,101 active COVID-19 cases

Provincial death toll has risen by nine

COVID-19. (Image courtesy CDC)
Alberta reports 1,731 new COVID-19 cases on Saturday

The province’s central zone has 992 active cases

Idyllic winter scenes are part of the atmosphere of the holiday season, and are depicted in many seasonal movies. How much do you know about holiday movies? Put your knowledge to the test. (Pixabay.com)
QUIZ: Test your knowledge of holiday movies and television specials

The festive season is a time for relaxing and enjoying some seasonal favourites

Fossil finds at Mt. Stephen. (Photo: Sarah Fuller/Parks Canada)
Extreme hiking, time travel and science converge in the Burgess Shale

Climb high in the alpine and trace your family tree back millions of years – to our ocean ancestors

Deputy Prime Minister and Minister of Finance Chrystia Freeland listens to a question from a reporter on the phone during a news conference in Ottawa, Monday, Nov. 30, 2020. THE CANADIAN PRESS/Adrian Wyld
Spending too little worse than spending too much, Freeland says as Canada’s deficit tops $381B

‘The risk of providing too little support now outweighs that of providing too much’

Executive Director and Co-Founder of Rock Soup Craig Haavalsen is sleeping in a tent outside Rock Soup’s location until the Go Fund Me for Rock Soup raises $10,000. Shaela Dansereau/ Pipestone Flyer.
Putting normalcy into asking for help: New non-profit sets up in Wetaskiwin

Rock Soup non-profit is a new non-secular Food Bank putting down roots in Wetaskiwin.

Wetaskiwin Composite High School. Shaela Dansereau/ Pipestone Flyer.
Wetaskiwin Regional Public Schools prepare for transition back to online learning

Grades 7-12 will are mandated to transfer to online learning starting Nov. 30, 2020.

Lawyer Devon Page, Ecojustice Canada’s executive director, pauses during a news conference in Vancouver on Wed., Sept. 26, 2012. The environmental law group has lost its bid to pause Alberta’s inquiry into where critics of its oil and gas industry get their funding. Ecojustice sought an injunction this summer to suspend the inquiry, headed by forensic accountant Steve Allan, until there is a decision on whether it’s legal. nbsp;THE CANADIAN PRESS/Darryl Dyck
Judge tosses application to pause Alberta inquiry into funding of oil and gas foes

Ecojustice sought an injunction in the summer to suspend the inquiry

Janelle Robinson owns and operates Spirit’s Respite Ranch near Stettler. The Ranch, just north of Stettler, is an animal therapy ranch that helps those with special needs and conditions ranging from PTSD to anxiety. Mark Weber/Stettler Independent
Spirit’s Respite Ranch near Stettler provides support through animal interaction

‘I also come from a family of doers - if something that is needed isn’t there, you just figure it out’

A pedestrian makes their way through the snow in downtown Ottawa on Wednesday, Nov. 25, 2020. THE CANADIAN PRESS/Sean Kilpatrick
Wild winter, drastic swings in store for Canada this year: Weather Network

In British Columbia and the Prairies, forecasters are calling for above-average snowfall levels

NDP Leader John Horgan, left, speaks as local candidate Ravi Kahlon listens during a campaign stop at Kahlon’s home in North Delta, B.C., on April 18, 2017. THE CANADIAN PRESS/Darryl Dyck

Most Read